July 2022 Updates:
The schools are now closed until September. Parents often struggle with childcare in this period. They have several popular options: either sending them under the keeping of their grandparents, registering them to summer camps/schools/daycares, or even bringing them to their workplace or leaving them unattended.
Newly established enterprises in June: 13,272.
Closed enterprises in June: 1,687
Vietnam’s economy looks on course to surpassing its 2022 growth goal, as a better-than-expected second-quarter performance pointed to a broad-based recovery. The global context facilitates the supply chain shift to Vietnam, which is emerging as an attractive alternative destination for foreign investment amid trade disruptions from China’s lockdown, the war in Ukraine and lingering tensions between Beijing and Washington. The current labour supply is estimated to meet only 60% of enterprises' labour demand.
The long-standing labour shortage is causing problems for many enterprises in Vietnam. The challenges are greater for firms that often need a large number of employees, such as those in the garment industry, the footwear industry, and services such as logistics, delivery, export-import, and stores.
Enterprises (especially in manufacturing sectors) mobilizes various channels to recruit workers, including onsite and online channels. Some enterprises actively come to areas in the adjacent provinces to the factory’s location and to launch out-reach programmes to attract workers.
In addition to these recruitment practices, the enterprises now tend to retain their interns and apprentices. Collaboration with vocational training centers is an access to a pool of young students (probably including young workers from 15-18 years of age).
Since July 1, 2022, the regional minimum wages have been increased. Specifically:
Region 1 monthly minimum wage increases 260.000 VND (equivalent to 11,13 USD) from 4.420.000 VND to 4.680.000 VND (from 189,28 USD to 200,41 USD)
Region 2 monthly minimum wage increases 240.000 VND (equivalent to 10,28 USD) from 3.920.000 VND to 4.160.000 VND (from 167,87 USD to 178,14 USD)
Region 3 monthly minimum wage increases 210.000 VND (equivalent to 08,99 USD) from 3.430.000 VND to 3.640.000 VND (from 146,88 USD to 155,88 USD)
Region 4 monthly minimum wage increases 180.000 VND (equivalent to 07,71 USD) from 3.070.000 VND to 3.250.000 VND (from 131,47 USD to 139,17 USD)
The regional hourly minimum wages has been introduced at the following rates:
Region 1 hourly minim wage – 22.500 VND/hour (0,96 USD)
Region 2 hourly minim wage – 20.000 VND/hour (0,86 USD)
Region 3 hourly minim wage – 17.500 VND/hour (0,75 USD)
Region 4 hourly minim wage – 15.600 VND/hour (0,87 USD)
June 2022 Updates:
Schools in Vietnam are now closed for the summer. For many parents, this is a challenging period as they have to find a childcare solution for when they work. Common options for parents in Vietnam during holidays are: sending them under the keeping of their grandparents, registering them to summer camps/schools/daycares, even bringing them to their workplace or leaving them unattended.
Vietnam’s manufacturing sector has been on a continuous road to recovery. However, labour shortage is affecting a wide range of enterprises from various industries. Even with better wages and benefits, enterprises are not able to find enough of employees/workers to meet their demands. According to the data of TopCV, 43.2% of enterprises are suffering from labour shortage, which marks an increase of 1.6% compared to 2020. The labour shortage situation is mainly found in manufacturing sectors such as garments, textile, electronics and wood processing. Enterprises (especially in the manufacturing sectors) mobilise various channels to recruit workers, including onsite and online channels. Some enterprises actively come to areas in the adjacent provinces to the factory’s location to launch out-reach programmes to attract workers.
The minimum wage in Vietnam is expected to increase starting in July 2022 in an effort to improve workers’ incomes as workers cannot afford basic necessities on the current minimum wage rate, especially in the urban areas where living costs have increased significantly over the years.
MAY 2022 UPDATES:
Although orders have been normal, manufacturing has been impacted by the lockdowns in China due toshipment delays.
Labour shortage is an issue, particularly in the north. It is estimated that 120,000 workers are needed in the garment, electronics, wood processing sectors.
The minimum wage is expected to increase starting July 2022 in an effort to improve workers’ incomes as it does not meet the living wage standard, especially for those in the bigger cities where living costs have increased significantly over the years.
APRIL 2022 UPDATES:
Schools at all levels have physically reopened in Vietnam. According to local media, even though children are back to face-to-face learning, prolonged remote learning has had an adverse impact on some children’s mental health. According to an article by Báo Người Lao Động, many children have not received timely support from their families and schools. It also reported that during a seminar on “'How to get rid of the risk of school psychological disorders due to the influence of COVID-19” organised by by Tien Phong Newspaper many students shared that they experienced stress, tension and extreme loneliness but their parents did not listen.
A significant increase in the number of orders has been observed in the garment and wood processing industries in Vietnam.
According to the latest government-provided statistics, in the first 3 months of 2022, the whole country had nearly 34.6 thousand newly registered enterprises representing an increase of 18.1% in the number of enterprises. The results of the survey of business trends in the manufacturing industry in the first quarter of 2022 showed that 28.4% of surveyed enterprises rated that their production and business situation is better than in the fourth quarter of 2021; 35.8% of enterprises said that it is stable and 35.8% of enterprises rated it as having difficulties.
The General Statistic Office, the governmental agency in charge of providing labour market information, recently published a press release on the status quo of employment and labour market in the 1st quarter of 2022. The press release stated that in the context of a high increase in the number of COVID-19 cases, the labour market still has positive signals due to high vaccination coverage and less travelling restrictions. The employment in Q1/2022 has increased, compared to that in Q4/2021. The monthly average income has increased as well. The number of employed people aged 15 and over was 50.0 million people, an increase of 962.6 thousand people compared to the previous quarter and an increase of 132.2 thousand people over the same period last year. This increase was mainly in urban areas and in men.
There is a prominent trend of relocating factories to the areas where workers live. In the pandemic, a huge flow of migrant workers returned to their hometowns and decided to settle instead of returning to industrial zones/hubs. Therefore, to deal with this labour movement, big companies are now attempting to “follow” workers to set up the factories in more rural areas – hometowns of migrant workers.
Domestic travel restrictions have been lifted as have all international travel restrictions.
While the statistics indicates an increase in employment and monthly wages in general, workers’ income is low. A survey conducted by the national union (Vietnam General Confederation of labour) in April 2022 pointed out that 55.6% of surveyed workers have an income sufficient for their basic living needs. 23% of workers have to spend their incomes thriftily without savings. And 13% of workers said that they can’t live with the current income. This leads workers to work overtime excessively to earn more.
The National Wage Council (a tripartite institution on determining the wage floor in Vietnam) decided to fix the regional minimum wage increase in 2022 and 2023 at 6%, to be effective from July 1, 2022.
MARCH 2022 UPDATES:
The practice of physical education varies among provinces in Vietnam. In Hanoi for example, after two weeks of opening schools at the beginning of February 2022, in a context of the highest surge of Covid-19 affected cases, the authority decided to resume online learning for children from 1st to 6th grades (i.e., primary school and first year of secondary school). The children from 7th to 12th can either go to school physically or virtually depending on their Covid-19 infection status. Children in kindergarten have not returned to school.
In Ho Chi Minh city, physical education is available for all children from kindergarten to high school after 9 months of online learning.
In other provinces, there is a mixture of both online and onsite education.
Production in key cities and provinces are also witnessing forward momentum. For example, large garment companies in Vietnam are still looking to recruit more workers as they continue to see stable orders, with some having orders until April 2022, according to Navigos Search.
According to our own visits at the factory, the number of orders (in garment and footwear industries) are stable.
Unlike nine months ago, when the Delta variant was spreading through a mostly unvaccinated population, now millions of factory workers have been fully vaccinated and the Omicron variant is proving less severe, the government said. Therefore, the factories are not shutting down their operations.
Vietnam’s government has chosen to live with the virus, with more than 79 per cent of the population fully vaccinated. A combination of these factors continues to make Vietnam an attractive investment destination.
Labour demand is likely to increase further by Q2 2022 when businesses are back to the new normal and operate at their highest capacity.
Due to the concern of Covid-19 flare ups and the increasing cost of living, thousands of workers did not return to bigger cities in Vietnam such as Ho Chi Minh City or Hanoi to work and it has led to a shortage in labour in the big cities. The industries have tried to expand into hinterlands to address this issue so more factories are opening in provinces and this has attracted more workers to apply than in bigger cities where living costs are higher. In the north, the rapid increase in new Covid cases is leading to a slight labour shortage.
To actively recruit and keep employees, businesses are offering support packages, benefits and more stringent H&S measures to ensure a safe work environment.
The most effective recruitment channels are participating in job exchanges, associating with HR firms, or working directly with vocational schools. Manufacturing enterprises may consider signing mutual agreements with vocational schools in the area to recruit students for internships and graduates for official positions. Companies can offer scholarships or internship allowances and other welfare schemes such as meals, fuel, or transportation to remain competitive.
Vietnam has lifted all movement restrictions.
A new report by the Vietnam Women's Association on female migrant workers, launched on 3rd March 2022, stated that due to long working hours and low income, migrant women have very few opportunities for recreation and sports. It is also very difficult for female migrant workers to access quality schools. One alarming issue that has emerged is that many migrant women are entangled in loan sharking, online loan applications, etc. More information is available in this Vietnamese news report.
According to a recent survey published by the Ministry of Labor-Invalids and Social Affairs on salary in 2021, the average salary of workers is 7.84 million VND/month (including overtime and allowances). With the rapid increase of petrol and oil, consumer CPI has increased significantly with average growth of 1.84% in 2021 compared to the previous year. This situation makes it difficult for workers to maintain an adequate standard of living.
In response to this, the Minister of Labour-Invalids and Social Affairs proposed to National Assembly to increase the number of overtime hours worked per month from 40 hours to 72 hours (1.8 times higher than the previous provision). During the past inspection, the Ministry noted that due to the pressure of orders, some businesses directly negotiated with employees to increase overtime.
About two thousand workers of Triumph International Vietnam Company based in Song Than 1 Industrial Park, Di An city, Binh Duong province, went on strike starting from March 20. On March 22, they told state media the reason they refused to work was because salaries will only increase by 3% this year instead of 5%. Workers believe that they are not earning enough to cover their daily living expenses when market prices are high. More details on this case can be found here.
While no new statistics on child labour have been published in 2022 to date, the national Child Protection Agency (government entity) has warned about the potential increase in child labour rates due to the Covid-19 pandemic.
JANUARY 2022 UPDATES:
Update on factories:
Factories in Vietnam in general have resumed operating as normal, including project factories in collaboration with The Centre.
Businesses continue to face labour shortages as workers are still hesitant to go to bigger provinces or cities to work after the lockdown. The situation may deteriorate further after the majority of the workers return to their hometown for Lunar New Year holidays and might not come back to work.
Some factories have reportedly cut Tet bonuses, Tet being the Vietnamese commemoration of the Lunar New Year. This has sparked protests among workers, particularly in Bien Hoa in southern Vietnam.
Impact on children and working parents:
As of January 2022, students from 13 years old have resumed going to school partially (half-day at school and half-day studying online to maintain social distancing) in Vietnam after a long time studying online full time due to the pandemic. It is expected that all other students and children can resume schooling normally after the Lunar New Year holidays, tentatively from mid-February.
SEPTEMBER 2021 UPDATES:
Updates from Factories Implementing Programmes with The Centre:
Factories in Ho Chi Minh City and some southern provinces in Vietnam are continuing to apply three-on-the-spot policies until at least September 15. Below are updated from factories currently implementing programmes with The Centre in Ho Chi Minh City:
One printing factory has 100% of its workforce working as usual as the factory can meet the “three-on-the-spot” (production on the spot - eat on the spot - rest on the spot) requirements. 100% of employees have been vaccinated with the first dose of the COVID-19 vaccine.
Two apparel factories have suspended its entire workforce from working because the factory cannot meet the “three-on-the-spot” requirements. The factories are now awaiting further guidance from the local authorities about when they can resume operations. One of those two factories has already vaccinated 100% of their workforce with the first dose.
One apparel factory has arranged one third of its workforce to do “three-on-the-spot”. The remaining two thirds of the workforce must temporarily suspend work. All the working workers must take a COVID-19 test every week. 100% of employees have been vaccinated with the first dose of the vaccine.
The new school year begun on September 5th in major cities such as Hanoi and Ho Chi Minh. Children attend school via online platforms like Zoom or Google Meet and they are expected to continue attending virtual classes until the end of the year when the COVID situation improves.
Parents have reported having trouble meeting the technical requirements for virtual learning, with many finding it difficult to purchase new or old devices as laptops, tablets or smartphones due to financial constraints.
Challenges for businesses and workers:
Many companies wishing to continue operations and implement the “three-on-the-spot” policy have had to make substantial investments to meet the requirements. For example, Intel Corp. has reportedly spent 140 billion dong ($6.1 million) in just one month to meet strict Vietnamese anti-virus mandates for factories in Ho Chi Minh City to ensure it can keep operating. The costs include providing sleeping facilities for workers. Intel Vietnam has had to cover the costs of hotel rooms and daily virus tests for thousands of workers, both its own employees and those of its suppliers.
Extended social distancing orders due to a continuous rise in new cases in the community continue to impact the workforce and businesses. For example: 18,464 business households stopped working in HCMC, while nearly 350,000 freelance workers lost their jobs. A similar situation has been observed in nearby provinces such as Dong Nai with more than 20,000 workers losing their jobs, while the number in Binh Duong is more than 15,000.
AUGUST 2021 UPDATES:
The Emergence of "Sleepover Factories"
A growing number of factories in Vietnam are being ordered to create production bubbles whereby workers live and sleep in the factory in order to stay open. The orders were first issued in Ho Chi Minh City, its surrounding industrial zones and some southern provinces, but is beginning to spread as a model across the country. Under this policy, factories wishing to continue production must meet a number of strict requirements including adequate accommodation and meal solutions and fire safety, regular COVID testing etc. According to various news reports, a growing number of suppliers linked to global brands are adapting the measures, with thousands of workers currently sleeping and working in the factories. Reports are also emerging of some factories allowing workers to take their children to live in the factories with them out of compassionate grounds, but no official policies or guidance seem to be in place to ensure the wellbeing of these children.
In other news, Ho Chi Minh City extended its social distancing measures under Directive 16 until at least August 1 with stronger measures in certain areas. Hanoi authorities imposed 15 days of social distancing measures under the strict Directive 16 from July 24. The majority of public transport will be shut, while travel won’t be allowed to other localities unless for valid reasons. 16 southern localities including the Mekong Delta region have been placed under strict social distancing measures under Directive 16 from July 18 for two weeks.
The Centre's Actions
The Centre is continuing to support children taking part in child labour remediation programmes with essential living stipends and is in regular contact with their families.
JULY 2021 UPDATES:
The status of factories working with The Centre
In June, we reported that three factories connected to programmes with The Centre had detected positive COVID cases among their workforce. As of July 9, two of the factories in Ho Chi Minh are now operating normally again, with no new cases detected since June. The third factory, a furniture factory in Binh Duong, is still under lockdown due to new infections there.
All other factories connected to The Centre are operating normally.
Impact on workers:
According to the General Statistics Office of Vietnam (GSO), in the second quarter of 2021, there were 12.8 million people aged 15 and over negatively affected by the COVID-19 pandemic, including those who lost their jobs, got furloughed, worked alternate shifts, reduced working hours, reduced income, etc. As such, compared to the first quarter of 2021, the COVID-19 pandemic has resulted in at least 3.7 million more workers being negatively affected. The most severely affected are workers aged 25-54 with 75% of the total adversely affected.
Specifically, out of a total of 12.8 million people negatively impacted by the COVID-19 pandemic, 557 thousand people lost their jobs, accounting for 4.4%; 4.1 million people got furloughed/suspended production and business operations, accounting for 31.8%; 4.3 million people suffered the reduction in working hours or were forced to work alternate shifts, accounting for 34.1%, and 8.5 million workers suffered income reduction, accounting for 66.4%. Workers in urban areas suffered more damage than in rural areas. Up to 21.9% of workers in urban areas, compared to 14.3% in rural areas, were adversely affected.
According to an article posted by Bloomberg, some factories in the northern provinces of Bac Ninh and Bac Giang as well as Ho Chi Minh City are asking their workers to sleep on factory floors to minimise disruption. The workers are sleeping on metal bunk beds with bamboo mats and cots in makeshift dormitories as well as in tents pitched on cement floors inside cavernous halls, and are quarantined until they test negative after returning from home.
Support for workers and businesses:
Vietnam plans to aid those financially affected by Covid-19 with a VND26 trillion ($1.13 billion) package. Those having lost their jobs due to the COVID-19 crisis for 14 days or more are to receive a monthly allowance of VND1.8 million. Part-time workers who were unemployed but have not received related benefits are to access a monthly allowance of VND1 million. Poor and near-poor households are to receive VND250,000 per month while those with a record of meritorious services to the nation are to receive get VND500,000 per month. Household businesses with revenues below VND100 million a year who’ve had to suspend operations due to the COVID-19 pandemic are also to be supported with VND1 million per month.
JUNE 2021 UPDATES:
The status of factories working with The Centre:
With COVID-19 cases increasing in Vietnam, three factories that are in touch with The Centre have been affected by new COVID-19 cases:
A positive case was detected at one garment factory in Ho Chi Minh City on June 2nd. The factory has been under lockdown and has ceased all operations until June 18th if no other new cases emerge. After the recent 3rd test on June 12th, all results were negative.
One large footwear factory in Ho Chi Minh City with around 65,000 workers recorded a positive case on June 9th, resulting in a lockdown of an entire department employing 1,100 employees. Production has also been postponed in this department until further tests return 100% negative results. The rest of the factory is still operating.
Two new cases were found on June 15th in one furniture factory in Binh Duong. The factory is under lockdown and production has been postponed until further tests come back negative.
Other factories related to The Centre are operating normally.
As of June 15, 2021, Vietnam’s Ministry of Health confirmed a total of 10,810 cases of COVID-19. However, 4,236 of the affected patients have recovered and been discharged from hospitals. Vietnam has also recorded 59 deaths due to the pandemic. The latest community transmission cases have been reported from Bac Giang, Bac Ninh, Binh Duong and Ho Chi Minh City.
Ho Chi Minh City authorities extended social distancing guidelines for another two weeks until June 30 due to the recent increase in cases. Go Vap district and District 12’s Thanh Loc Ward will now be under Directive 15 measures like the rest of the city. The developments come after the city recorded the highest number of daily cases on June 13. Vietnam approved the emergency use of the Pfizer-BioNTech and Sinopharm COVID-19 vaccine.
More than 15 provinces, mostly in Southern Vietnam, have orders to place people from HCMC in quarantine up to 21 days to prevent the risk of community transmission.
Binh Duong province also imposed social distancing measures from June 15 for the whole province after finding out 12 new community transmission cases.
The impact on families and workers:
It is estimated that more than 42,000 workers in HCMC lost their jobs or stopped working temporarily and around 9,000 enterprises stopped operating due to COVID-19 impacts during the last five months. The situation is expected to worsen due to an extended social distancing order in HCMC until end of June.
The HCMC authority has given 27 billion VND in cash to 27,000 workers who have been affected by COVID-19. The authority is also accelerating the vaccine programme with the goal of vaccinating at least 70% of the national population by the end of the year.
MAY 2021 UPDATES:
The status of factories working with The Centre:
One toy factory that we were in contact with in 2020 about the impact of COVID-19 confirmed that they have started to receive new orders since May 2021 and are back to 100% capacity
One garment factory we have been in touch with says they began to receive more orders when the production of their clients moved from Myanmar to Vietnam
Other factories working with The Centre are operating as normal
Vietnam is currently in the fourth wave of community transmission, which is more widespread than the previous wave. Twenty provinces in Vietnam are affected. The most recent cases of community transmission occured in northern provinces including Bac Giang, Bac Ninh, Hanoi, Lang Son and Ha Nam
Hanoi authorities have shut non-essential services like dine-in services, barbers and salons since May 25 due to a rise in local infections. In addition, all people returning from Hanoi must submit a medical declaration within 24 hours of arrival
Impact on families and workers:
Schools have closed and switched to online learning since early May. Public schools began the summer holiday from mid-May, which is two weeks earlier than planned
Starting mid-May, with workers accounting for 80 percent of all COVID-19 cases so far, Bac Giang Province near Hanoi has decided to shut down four industrial parks until further notice. Bac Giang has registered 411 cases, including 326 in industrial parks, it is currently quarantining more than 6,000 people for having been in direct contact with infected people and medically monitoring 30,000 others. Apple suppliers Foxconn and Luxshare and many apparel suppliers have been forced to temporarily shut down their factories due to the outbreak in Bac Giang province.
Due to the impact of COVID-19 in Bac Giang, it is estimated 51,000 workers from 54 enterprises have stopped working temporarily because of quarantine or pause in operation.
APRIL 2021 UPDATES:
As of April 23, 2021, Vietnam’s Ministry of Health confirmed a total of 2,824 cases of COVID-19. However, 2,490 of the affected patients have recovered and been discharged from hospitals. Vietnam has also recorded 35 deaths due to the pandemic. The latest cases were all imported and quarantined on arrival.
UNICEF and the Australian embassy in Hanoi have announced a US$10.5 million package in delivery assistance of the COVID-19 vaccines to Vietnam.
Vietnam is considering the implementation of vaccine passports for three groups of vaccinated people such as Vietnamese stranded abroad, foreign business travellers and foreign travellers. While the plan is in consideration, no date for the implementation has been set.
More than 46,000 people (healthcare and frontline workers) have been inoculated against the pandemic in Vietnam since Vietnam’s vaccination programme began on March 8.
General industry updates:
Industry in the first quarter of 2021 achieved a growth rate of 6.5% over the same period last year; of which the manufacturing increased by 9.45%, higher than the growth rate of 7.12% in the same period last year but lower than the growth rate of 14.30% in the first quarter of 2018 and 11.52% of the quarter I/2019; electricity production and distribution grew stably; The mining industry fell sharply mainly due to the sharp decline in crude petroleum and natural gas.
The index of industrial shipment (IIS) of the manufacturing in March 2021 increased by 24.1% over the previous month and increased by 5.3% over the same period last year. Overall, in the quarter I/2021, the IIS of the manufacturing activities increased by 5.8% over the same period last year (the quarter I/2020 increased by 2.8%).
The number of newly established enterprises in the first 3 months of 2021 decreased by 1.4% compared to the same period last year, but the registered capital increased by 27.5%, the reason was increasing the number of enterprises with registered capital of over 100 billion VND (up 36.8%) and reducing the number of businesses with registered capital below 10 billion VND (down 3.3%). The enterprises ceased for a certain period, an increase of 28.2% compared to the same period in 2020; enterprises completed dissolution procedures, an increase of 26.4%. These were mostly young, small-sized and vulnerable businesses due to negative external influences. Results on the business tendency survey of the manufacturing enterprises showed that enterprises expected their production and business in the second quarter of 2021 to be better than the first quarter of 2021.
MARCH 2021 UPDATES:
One toy factory that The Centre is working with has been operating at 50% capacity since the post-Lunar New Year holidays due to low orders. They cannot predict when the situation will get better.
Schools in Ho Chi Minh City resumed on March 1 and in Hanoi on March 2 following a month-long break to prevent the spread of the pandemic.
FEBRUARY 2021 UPDATES:
After 55 days free of community transmissions, Vietnam has recorded 244 new cases in the community between the period of January 27 - February 1, 2021. By February 1, the latest community transmission cases have been reported in 9 cities/provinces including Hai Duong, Quang Ninh, Hanoi, Ho Chi Minh City, Binh Duong, Gia Lai, Bac Ninh, Hai Phong and Hoa Binh.
Lockdown and social distancing orders have been applied to some areas in the mentioned provinces and cities. Quang Ninh and Hai Duong have suspended all public and passenger transport schools have also been suspended immediately on January 28.
As of February 1, 2021, Vietnam’s Ministry of Health confirmed a total of 1,817 cases of COVID-19.
The Ministry of Health also approved the Oxford-AstraZeneca vaccine. While Vietnam was set to buy the vaccine as reported previously, the new outbreak has urged authorities to quicken the procurement of the vaccine to February.
As a precaution and due to the new outbreak, Vietnam has extended the quarantine period to 21 days from the present 14 days.
The situation of workers and families:
Due to financial difficulties, it is expected up to 70% of workers in Ho Chi Minh City (migrated from the North and the Central Vietnam) will not go back to their hometown during this Lunar New Year festival; this rate was 50% in 2020.
However, workers whose hometown is not too far away are now asking for early leaves for the New Year as they are afraid of sudden lockdown due to COVID-19 outbreaks and and not being able to return home.
Vietnam’s national trade union the Vietnam General Confederation of Labor (VGCL) will support workers who have been affected by the pandemic and natural disasters in 2020 with up to VND 1-2 million (US$43-86) each for Tet – the Vietnamese New Year Holiday which begins on February 10.
As of Feb 01, 2021, 18 provinces and cities have orders for students & pupils of all levels to homeschool and take Lunar New Year holidays earlier as a means of social distancing. Lunar New Year holidays are set from 10-16 Feb, hence it is challenging for parents to take care of their children when they do not go to school during this time.
Impact on industry:
The IHS Markit Vietnam Manufacturing PMI dropped to 51.3 in January 2021 from 51.7 a month earlier, amid ongoing effects of the COVID-19 pandemic, with new orders increasing at a slower rate. At the same time, output, export sales, employment, and purchasing activity were broadly unchanged. Efforts to secure inputs were stymied by severe disruption to supply chains again, with delivery time lengthening the most in nearly a decade.
Meanwhile, a lack of shipping containers and raw material shortages meant severe supply-chain disruption, which in turn contributed to the fastest rise in input costs since June 2018. Output prices, in the meantime, increased for the fifth successive month.
DECEMBER 2020 UPDATES:
As of December 21, Vietnam's Ministry of Health confirmed a total of 1,413 cases of COVID-19. However, 1,269 of the affected patients have recovered and been discharged from hospitals. Vietnam has also recorded 35 deaths due to the pandemic.
Human trials of Vietnam’s locally made COVID-19 vaccine began with 60 volunteers on December 17 in Hanoi.
Several elementary schools and high schools in some districts in Ho Chi Minh City had asked some or all of their students to stay home due to connections with patient 1,347 of the latest local COVID-19 cases.
Actions taken by The Centre:
The Centre is continuing to provide monthly living stipends or tuition fee support to young workers who lost their jobs this year and are facing hardships.
OCTOBER 2020 UPDATES:
Vietnam has gone 50 days without domestic infections. International flights are planned to be restarted in the 4th quarter of 2020.
According to the report on the impact of Covid-19 on labour and employment of 3rd quarter of 2020 from General Statistics Office of Vietnam (GSO), nationwide, 31.8 million people aged 15 and over were negatively affected by Covid-19, including those who lost their jobs, went on furlough/took time off work alternately, reduced working hours, suffered income reduction, etc. Of these, 68.9% of people suffered income reduction, albeit to a small degree, nearly 40.0% reduced working hours/took time off work alternately/worked in alternate schedules and about 14.0% went on furlough or suspended their business activities.
The labour force in the third quarter of 2020 recovered faster in rural areas and among female workers. Specifically, compared with the previous quarter, the labour force in rural areas increased by 3.0%, 0.8 percentage points higher than the growth rate of urban areas; the female labour force increased by 4.1%, 2.6 percentage points higher than the growth rate of the male labour force.
The situation of workers:
According to a recent workers' survey conducted by The Centre at a garment factory in Vietnam:
16 out of 50 workers advised that they have had their working hours reduced, and therefore 10 out of 50 said their salary was reduced.
While 30 out of 50 workers said the pandemic does not affect their family future plan, 8 of the participants are thinking of sending their children back to their hometown, and 15 workers think that they will go back to their hometown if they lose their jobs
SEPTEMBER 2020 UPDATES:
The situation at factories:
Out of 37 factories surveyed, 35 factories were operational. Two factories were temporarily and partially closed (one garment factory has 50% of their workforce back to work and is planning to return to 100% capacity from September; one toy factory still only operates at 50% capacity).
Amid the impact of COVID-19, as many as 10,400 businesses completed procedures for dissolution in the first eight months of the year. The General Statistics Office (GSO) has reported that 34,300 businesses registered to suspend their operation for a definite time, while 24,200 businesses stopped operations. At least 72 percent of businesses said they did not have money to pay workers, social insurance, health insurance, unemployment insurance, and trade union fees. They also lacked money to pay bank loan interest, buy materials, and lease storehouses, workshops and offices.
In the worst scenario drawn up by the Ministry of Labor, War Invalids and Social Affairs (MOLISA), the number of businesses suffering from the pandemic could reach 70 percent in the time to come, and 60,000-70,000 jobs would be lost each month. It is estimated that 3.5-5 million workers may be suspended.
In the 2nd quarter, it is estimated that around 1.3 million have lost their jobs in the country due to the impact of the first wave of Covid-19. In Ho Chi Minh City, it is estimated that in the worst-case scenario of a second wave, there will be around 180,000 unemployed labourers. The businesses most severely affected are services, tourism and accommodation, and transportation; followed by footwear, textiles & apparel, food processing, and wood processing.
AUGUST 2020 UPDATES:
The situation at factories:
A garment factory we’ve been in touch with recently said that orders have started to return from August and they now have 50% of their workforce back, and are planning to return to 100% capacity from early September. They are also recruiting more workers as they foresee more production orders in September.
Vietnamese news outlets have recently reported on Hue Phong, a Taiwanese shoe factory (not affiliated with CCR CSR) in Ho Chi Minh City's Go Vap District, which has announced that it is firing 1,577 workers from August 30 due to the impact of COVID-19. Of these, 198 are pregnant women due to give birth in the next few months. The Go Vap District Labour Federation has stepped in to support these women by buying household health insurance for them. This is the 3rd round of firings at Hue Phong due to COVID-19; a total of 4,023 workers have been laid off to date.
The number of Covid-19 infections in the community continues to increase in the cities of Da Nang (central Vietnam) and Hai Duong (northern Vietnam). There are now 1016 confirmed cases with 27 deaths recorded. According to the government, the situation is under control but restriction measures continue to be applied in the above-mentioned areas.
The export rate of Vietnam’s garment industry will continue to decrease from 14 to 18% according to Vietnam National Textile and Garment Group. Enterprises are also paying more attention to the local market, as well as producing masks and PPE to maintain workers' jobs.
The situation of workers:
According to the latest Vietnam's quarterly Labor Force Survey released in July 2020, 30.8 million persons aged 15 and over were adversely affected by COVID-19 by end of June 2020, including those who lost their jobs, had their working hours cut or income reduced. The survey, carried out by the Vietnam's General Statistics Office (GSO) with ILO technical support, showed a record low level of the labour force. It shrank by 2.2 million persons compared to the previous quarter and by 2.4 million persons compared to the same period last year. The reduction in participation in the labour force was bigger in rural areas and the female workforce.
The situation of children:
Schools are expected to resume starting from the 2nd week of September after the summer holidays.
Measures by the government:
In addition to measures to fight Covid-19, the Vietnamese government is considering more support for people and businesses affected by the pandemic. The support would come in the form of extension and expansion of relief packages such as delaying and waiving of payment of taxes and fees, and allowing more people to access preferential loans, especially in priority fields.
The Ministry of Labor, Invalids and Social Affairs proposed a second relief package worth VND18.6 trillion (US$800 million), including a credit package of VND15 trillion (US$645.84 million) and financial support for vulnerable people of VND3.6 trillion (US$154.96 million). To date, the government has rolled out supporting programmes such as a credit aid package worth VND300 trillion (US$12.87 billion), a VND180-trillion (US$7.63 billion) fiscal stimulus package in forms of delay of payment of value-added tax, corporate tax and income tax, and a financial support package for vulnerable people worth VND62 trillion (US$2.7 billion).
Actions taken by The Centre:
Monthly stipends or vocational training tuition support has been paid to young workers who lost their jobs and are in difficult situations.
AUGUST 2020 UPDATES:
The situation at factories:
New community transmission cases continue to rise in Vietnam. As of August 10th, cases have spread to 15 provinces and cities, with 841 confirmed cases in total and 13 deaths in total so far. Da Nang (the largest city in central Vietnam) is currently considered a COVID-19 hotspot. Despite the new outbreak, exports are expected to increase in the second half of 2020.
The government's VND62 trillion ($2.6 billion) financial support package for poor people and businesses affected by the Covid-19 pandemic has not been easily accessed by targeted beneficiaries due to too strict requirements, especially for workers as it requires workers to prove that they have been laid off because their employers have gone bankrupt or have no income due to COVID-19. The conditions to access the package are currently under review and will be revised so that workers can have better access to the package.
According to four recently interviewed factories:
All four factories continue to maintain disease prevention measures including daily body temperature checking, issuing medical masks free of charge for their workers, and making sure hand sanitisers and handwash gel/soap are available at the workplace.
Three factories foresee that they can maintain a stable production schedule in order not to negatively affect their workers' working hours and income.
One factory that has had to decrease its workers’ hours 50% has been support its workforce in other ways such as paying voluntary insurance for workers and maintaining mandatory social insurance for pregnant workers.
The situation of parent workers and children:
Workers who have had their salaries cut have reported facing difficulties covering basic living costs, especially migrant workers. Both local and migrant workers told The Centre that COVID-19 has impacted their spending on childcare. For example, some workers said they have to choose between paying for kindergarten/school and buying nutritious food for their children.
According to the survey results of a recent workers needs assessment:
24% of the participants think they need to look for a more stable job, while 19% are considering taking whatever job they can find, even ones they would not have considered before
28% of them may need to go back to their hometown if they lose their jobs
JULY 2020 UPDATES:
The situation at factories:
On July 26th, after 99 days without infection in the community, Vietnam has identified 4 new infected cases in the community in Danang (central area of Vietnam). Social distancing requirements are expected to be re-established for the next 15 days in Danang and the government requested everyone to be on alert again and resume practices such as wearing surgical masks, handwashing, etc.
Out of 35 factories, 33 factories were operational. Two factories were temporarily and partially closed (only 25% and 50% of the workforce from each factory are working).
According to the Ministry of Labour, War Invalids and Social Affairs (MOLISA), as of June 2020, 30.8 million labourers have been negatively affected by COVID-19 and up to 57.3% of them have had their incomes reduced. The average income in the second quarter has been reduced to 5.2 million VND (525,000 VND lower than in the first quarter and 279,000 VND lower than the same period in 2019). The situation is expected to worsen in July, August and September.
For garment, footwear, wood & furniture industries, exports are expected to increase in the second half of 2020 due to looser social distancing policies in the US, EU and Japanese markets.
The situation of parent workers and children:
Students and children were asked to stay home to mitigate the risk of a 2nd outbreak in Danang until further notice. Most of the schools will start summer holidays in early August.
Actions taken by The Centre:
We visited the home of one young worker who resigned and is currently in a difficult situation. The Centre is supporting him with a monthly stipend.
We are continuing to provide monthly living stipends or vocational training tuition support to young workers who lost their jobs and are finding themselves in difficulty.
JULY 2020 UPDATES
The situation at factories:
While the situation in Vietnam is improving, and there have been no new infections in 80 days, we are still seeing that factories are struggling with reduced orders, which is resulting in lay-offs and uncertainty. A case in point is one factory we spoke to in the south of Vietnam who has had to lay off 60% of its workers due to reduced orders.
In wood and furniture factories, orders from the US, EU and Japanese market have been reduced by 20-30%. Garment factories, meanwhile, have been experiencing up to 50% reduction in orders (compared to a 20-30% reduction in February).
Around 7.8 million workers lost their jobs or were furloughed due to the pandemic by the end of June 2020 as per the Ministry of Labour, War Invalids and Social Affairs (MOLISA).
As of July 9, out of 32 factories contacted one was partially closed (operating with just 25% of its workforce).
The government's VND62 trillion ($2.6 billion) financial support package for poor people and businesses affected by the Covid-19 pandemic has not worked well due to too strict requirements, especially for workers as they need to prove that they have been laid off because their employers have gone bankrupt or have no income during the period due to COVID-19. The conditions to access the package are currently under review and will be revised so that workers can have better access to the package.
The situation of parent workers and children:
Although schools have reopened and travel restrictions have been lifted, those families that have been laid off are facing financial uncertainty and hardship if they don’t succeed in finding decent-paying work straight away.
Meanwhile, with many factories struggling to maintain their full workforce due to reduced orders, we are seeing that many workers are facing extreme uncertainty about their future jobs and ability to support their families.
Children's school summer holiday was shortened to 1.5 months from mid-July until August (instead of the usual 3 months from June-August) as school was extended until mid-July.
The situation of young workers:
Ten out of 23 factories hired young workers. By July 9, the following information was obtained in relation to the young workers’ situation:
19% of young workers we are in touch with have lost their jobs during the pandemic, and some of those are now facing extreme financial hardships. The Centre has been offering financial and educational support to 5 young workers in extreme difficulty.
10 out of 14 young workers (71%) in a wood & furniture factory have returned to work after 1-month work stoppage, while the other 4 have moved to their hometowns to join their families.
Actions taken by The Centre:
As of July 9, The Centre has been paying for vocational training tuition and giving monthly living stipends to 5 young workers who've lost their jobs and are in particularly difficult situations.
We've been deploying our emergency fund to support children in-need in our child labour remediation programme.
Delivered COVID-19 health kits to two families taking part in The Centre’s child labour remediation programme.
Have adapted our services to the context of COVID-19 to enable continued support and to ensure a stronger focus on health & safety considerations.
JUNE 24, 2010 UPDATES
The situation at factories:
24% of surveyed factories had laid off workers, while 60% are considering laying off workers to reduce costs.
Two factories reported signing a temporary agreement with a proportion of their workforce for a work stoppage period of 2 months with an allowance to partly compensate for their loss of income. One factory paid VND 2.5 million (~USD 108) + a bag of 25kg of rice for the period, and the other paid VND 1 million/month (~USD 39/month) to each worker. Workers may be asked to return to work earlier as soon as the factory receives more production orders.
40% of factories expect a decrease in orders this year. Beginning from May, wood and furniture factories have reported an increase in orders. However, at the same time, there have been reports of factory closures in the garment sector due to lack of orders.
70% of the factories were not receiving support from the local government.
The situation of parent workers and children:
Schools have been re-opened since May 4th, 2020. Children can now go to school again.
Travel restrictions have been lifted completely in Vietnam since May, 2020.
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